Current Trends in Law - Accident compensation

In the judgment of the case - Lal Singh Marabi v. National Insurance Company Ltd. & Others , delivered on February 15, 2017, CJI Jagdish Singh Khehar, Justice N.V.Ramana and Justice Dr. D.Y. Chandrachud, at the Supreme Court have ruled that both the courts below- the MAC Tribunal  and the Madhya Pradesh High Court - have not rightly decided the amount of compensation to be granted to the appellants.

The appellant, who was severely injured in a motor accident, had filed this appeal, being aggrieved by the quantum of compensation awarded by the Madhya Pradesh High Court, at Jabalpur through its judgment and order of April 4, 2013. On April, 13, 2004, suddenly when the appellant was travelling in a mini bus from Mandla to Bamhni, being driven by the first suddenly the vehicle turned turtle at a place called Kishanpuri Ghat, resulting in grievous injuries to his left leg. He was rushed to the Medical College Hospital, Jabalpur, where he underwent treatment till April 19, 2004. As his condition was deteriorating, he was referred to Victoria Hospital in the same city , where in order to save his life his left leg had to be amputated from the thigh portion and he remained there as indoor patient till June 5, 2004.

Owing to the permanent disability caused on account of the amputation of his left leg, the appellant filed a claim petition before the Motor Accidents Claims Tribunal, seeking compensation of Rs. 10,10,000/-. The driver and owner of the bus were made parties along with the insurance company. For claiming the said amount, the appellant took a plea that he was a professional driver with a monthly earning of Rs. 4,000/-, which he lost due to the 90 pc disability sustained in the accident.

The Tribunal had decided the claim petition observing that

(i) the driver of the mini bus drove the vehicle negligently which caused the accident;

(ii) the claimant suffered serious injuries due to the accident and consequently his left leg has been severed from the upper portion of thigh, causing permanent disability; and

(iii) that on the date and at the time of the accident, the driver of the bus did not possess a valid license for driving the vehicle.

The Tribunal observed that the appellant could not provide the proof of his earning from his job of driving, as he did not produce any driving license or authentic evidence to establish his monthly earnings. The Tribunal came to the conclusion that the annual income of the appellant would have been Rs. 15,000/- and the accident caused a 60 pc decrease in his work efficiency. The Tribunal, therefore, fixed Rs. 1,62,000/- for physical and mental pain and compensation for the future  by applying a multiplier of '18' in view of the appellant's age being 29 at the time of the accident, besides Rs. 60,000/- for an artificial limb, Rs. 40,000 /- for medical expenses and Rs. 13,000/-towards expenses incurred for food, travelling etc. The Tribunal thereby directed a total compensation of Rs. 2,75,000/-payable by the driver and owner of the bus severally and jointly together with interest at 6 pc per annum and exempted the insurance company from liability.

Aggrieved by the quantum of compensation ordered by the Tribunal exempting the liability of the insurance company,  the appellant approached the HC by way of a misc. Appeal. The HC  upon deeming the annual income of the appellant to be Rs. 24,000/- enhanced the compensation amount to Rs. 2,44,800/- under the head 'permanent disability' and  awarded the total amount of Rs. 3,57,800/- after applying a multiplier of '17'. Though the HC agreed with the Tribunal that the insurance company is not liable to bear the burden of awarded  sum, in view of is judgment in the case - National Insurance Co. Ltd. v. Swaran Singh & Others - (2004) 3 SCC 297, the Apex-Court directed the insurance company to pay the awarded sum to the appellant first recover the same from the driver and owner of the bus.

The counsel for the insurance company pleaded before the Apex Court that this appeal was filed belatedly at instance of the bus-owner against whom the first respondent has got recovery rights. It was urged that only with an ulterior motive to prevent the  insurance company from proceeding with recovery, the bus-owner got this appeal filed with the connivance of the appellant. The Apex Court has been of the opinion that there is no denial of the fact, that the appellant had suffered a major injury in the accident and sustained a major injury in the accident and sustained a permanent disability by the amputation of his left leg. Consequently the appellant, who was only 29 years old at the time of accident, underwent agony,  both physically and mentally besides spending money on his treatment and for the artificial limb. It is clear from the medical certificate issued by prosecution witness, Dr. Naveen Kothari, that due to the amputation of his leg, the appellant sustained permanent disability of 90 pc.

The Court noted in the impugned judgment that the courts below have reduced the permanent disability factor from 90 pc to 60 pc. The Court has expressed dissatisfaction with reasoning of the courts below for reducing the permanent disability determined by the doctor to 60 pc. on the ground that despite the amputation of his left leg, the remaining body of the appellant is healthy. Upon appreciating the factual matrix of the case including the fact that with the amputated leg the appellant cannot pursue his livelihood as a driver or daily wage labourer and taking into account the Doctor's certificate, The Court has been of the considered opinion that the appellant has sustained a 90 pc permanent disability due to the accident.

Thus, considering the appellant's annual income as Rs. 24,000 /- per annum, 90 pc of it would come to Rs. 21,600/-and on  applying the multiplier of 17, he would be entitled under the head of 'permanent disability 'to compensation computed at Rs. 3,67,200/-, that is Rs. 21,600/- multiplied by 17. In the Court's view the appellant is also entitled to get Rs. 1,00,000/-, instead of Rs. 60,000/-as awarded by the HC towards the cost of the artificial limb.

Taking into account all these figures, the total quantum of compensation amount would stand enhanced from Rs. 3,57,800/- awarded by the HC to Rs. 5,20, 200/- and the Apex-Court awarded accordingly. The  Court has stated that the appellant is also entitled to receive interest at the rate of 6 pc per annum from the date of filing of claim petition till realization of the amount. The insurer has to pay the awarded amount  of Rs. 5,20,000 plus interest accrued thereon to the appellant within 6 weeks, and recover the same from the other two respondents severally and jointly. The Supreme Court has allowed the appeal, in terms of its directions in the judgment.